Robert Gardner

Articles from Robert Gardner

  • 7 Reasons Pension Funds can Feel Good Post Crisis

    In order to help pension schemes achieve their goals, we believed asset classes could offer three things that could help fund deficits; 1. growth e.g. equities and private equities; 2. risk control e.g. Liability Driven Investment (LDI); 3. cashflow matching e.g. Investment Grade Credit (IGC) We felt there were asset classes that offered all three benefits. Captured in our table of investment ideas, we sorted these asset classes in order of ‘easiness’: To what extent were they offering growth to fund the deficit? To what extent were they hedging and r ... ..read more
  • How Can “VUCA" Prepare You for the Future Post Brexit?

    On Friday, June 24th, Britain voted to leave the European Union. It’s fair to say this surprised a lot of people (on both sides), including the markets. Falling interest rates, a weaker pound and political uncertainty has left a lot of people feeling on edge. For those of us responsible for managing pension funds, can it be useful to reflect on the “VUCA” of our time. Volatility, Uncertainty, Complexity and Ambiguity Derived from the US military and now used in corporate strategy, VUCA is a term used to describe extreme conditions. For those of us in the w ... ..read more
  • HOW TO FINANCE THE UK'S FUTURE?

    In my last Pensions Expert column, I wrote about the challenge for the new Pensions Minister in balancing short-term political expediency with truly progressive pensions policy. If we are to achieve long-term sustainable retirement provision, policy needs to be aligned with long-term objectives rather than short-term vote-winning. There have been calls from some quarters for the new Pensions Minister, Ros Altmann, to consolidate the changes made under Steve Webb and his predecessors and resist radical reform. Yet affordability of pensions is one of the UK’s biggest challenges ... ..read more
  • DO PENSION FUNDS NEED A ‘COX’ TO STEER THE BOAT AND COORDINATE THE POWER AND RHYTHM OF THE ROWERS?

      Dawn hasn’t broken, the morning is dark. We climb into the boat. The air is cold, our all-in-one lycras are proving too thin, and the wind is biting at our backs. This is a time when we all question our motives – are we stupid, misguided or mad? What are we doing here, when we could be in bed? We take up our blades, shiver, and settle into our familiar seats. A contagious nod amongst the crew members signals the time, and our focus shifts to the cox*. “Attention!” – Her clear, loud voice signals the start – our postures correct, ... ..read more
  • BUILDING PENSIONS SUPERTEAMS

    “If you want to go fast, go alone. If you want to go far, go together.” African proverb   We all work in teams, both within and across organisations, to solve complex issues such as repairing final salary pension deficits or designing better outcomes for DC members. What is clear is that no single person, nor organisation, can solve these issues alone. So there’s a vital need for collective action. We need teams of trustees, CFOs, advisors, fund managers working together not just as a team but working well as a team. To work well, it is vit ... ..read more
  • ARE YOU SMART? HOW PENSION FUNDS CAN SET THE RIGHT KIND OF GOALS

    Pension funds face an eternally difficult process of setting goals and then making sure they reach them. It doesn’t sound complicated, but it is. The better a pension fund can get, though, at setting well thought-out goals, the better chances they have of reaching those goals. Ultimate goals for pension funds often include repairing the pensions deficit, reaching full funding and improving member security. When people’s pensions are on the line, it’s vital that these goals and milestones that come before them are set in a way that’s SMART: Specific, ... ..read more
  • VUCA - THE ACRONYM OF OUR TIME

    For those managing personal or institutional money, the world is becoming more volatile, uncertain, complex and ambiguous. The globalisation of the world economy, combined with the acceleration of technology, means stock, bond and currency markets are more volatile than ever. The 2008 Global Financial Crisis has been followed by bouts of volatility on the back of economic or political bad news like the developments in Greece and Europe and question marks like QE tapering in the US. And the world is more uncertain, too, as a result of rapidly evolving geo political systems, rules and re ... ..read more
  • STAYING CLASSY – SHARING IDEAS AND REPAIRING PENSIONS DEFICITS

    Last week, we at Redington released an annual publication called Asset Class 2013. It was put together by Redington Head of IC David Bennett and his team of consultants, who deal with over £270 bn of assets and the people who run those assets, on a daily basis, helping them to repair deficits and improve member security through smart investment strategy.  Asset Class 2013, much to our surprise, was the most-read and most-downloaded publication we've ever produced, by a long shot, with over 1000 downloads in the first day alone. It is a compilation of sh ... ..read more
  • ARE YOU SMART? HOW PENSION FUNDS CAN SET THE RIGHT KIND OF GOALS

      Pension funds face an eternally difficult process of setting goals and then making sure they reach them. It doesn’t sound complicated, but it is. The better a pension fund can get, though, at setting well thought-out goals, the better chances they have of reaching those goals. Ultimate goals for pension funds often include repairing the pensions deficit, reaching full funding and improving member security. When people’s pensions are on the line, it’s vital that these goals and milestones that come before them are set in a way that’s SMART:  ... ..read more
  • MATCH.COM? MAKING THE PENSIONS AND INFRASTRUCTURE ROMANCE WORK

        Since George Osborne’s Autumn Statement in 2011, pension funds and their advisors have been discussing the idea of investing in infrastructure. And the logic for this investment is sound: pension funds need low risk, long dated inflation-linked cash flows. They always have, they always will. Happily, the UK needs new infrastructure, much of the funding for which is long-dated and inflation-linked. Banks, which previously funded these endeavours, are no longer funding them, and pension funds seem to be the natural rebound relationship that might just turn st ... ..read more
  • WHAT ARE THE TOP CHALLENGES FACING DEFINED BENEFIT PENSIONS

    Dear Pensions Colleague, In the face of continuing economic uncertainty, we (Redington) would like to understand what the Defined Benefit pensions industry believes are the greatest challenges it currently faces, and what will be the greatest challenges in the coming years. With this information, we hope to collate the insights in a report in order to understand the motivations and concerns of those around us. Please take 3 to 5 minutes to complete the survey - https://www.surveymonkey.com/s/DBTop3 Thank you for your participation! The survey results will be made available for download ... ..read more
  • A GAME OF SNAKES & LADDERS

    In the UK as a final salary pension fund you may be feeling as if you have just landed on a ladder and risen several rows on the board game closer to the finish, i.e. full funding. The FTSE100 equity index had its best performing January since 1989 and the S&P500 has broken through the 14,000 level not reached since before the onset of the Global Financial Crisis in 2007. All of this is good news for pension funds invested in equities as their funding level will have improved significantly over the past few months. In the US it appears as if many pension funds have landed on a &ldqu ... ..read more
  • INFLATION-LINKED BOND ISSUANCE AND PENSIONS LIABILITIES

    Inflation-linked bonds offer one way of mitigating the inflation risk in pension scheme liabilities; however, this market also provides a number of challenges. Thankfully, alternative options to protect schemes against a rise in inflation do exist.   In a recent paper, we provide analysis on these key points:  Inflation-linked bond markets have expanded Inflation-linked outstanding issuance has quadrupled since 2005. Inflation-linked bonds in issuance amount to £235bn, with roughly £200bn in inflation-linked gilts and £35bn of corporate issuance. The liquid ... ..read more
  • 2013 A YEAR OF GOALS & COMMITMENTS

    Happy New Year! After a big night out we wake-up and write down our new year’s resolution(s). It’s the usual wish list - lose weight, get fitter, earn more money, give-up drinking, smoking etc. I have just listened to an excellent webinar by Shaa Wasmund “Why you should Forget New Year’s Resolutions”. @shaawasmund is the best selling author of “Stop Talking, Start Doing”, the UK’s best selling business book of 2012! She told us that by the 19th January, less than 3 weeks in, 85% of these New Year’s resolutions fail, leaving us f ... ..read more
  • DEAR SANTA, A WISH LIST FOR 2013

      Dear Santa, Despite the omens of approaching a year with the number ‘13’ in it, I am hopeful for the coming year and the opportunities for pension funds. Last year I asked for Eurozone Resolution, Lower Volatility and strength for pension funds to Act on Opportunities in my letter to you. I even dropped my tennis lessons with Rafael Nadal off the list, in the hopes of those wishes coming true. I guess you thought I wasn’t a good boy last year, though, because I didn’t really get any of the items on my list. I suppose it was a bit greedy of ... ..read more
  • THIS SEASON, HOWEVER YOU HEDGE... MERRY CHRISTMAS

    We wish you a Merry Christmas, and a prosperous New Year filled with joy and success. May 2013 be your best year yet!   ..read more
  • STEP 2 - ACCESS TO A LIABILITY DRIVEN INVESTING "LDI" HUB

        “….. the investment of the assets in such a way that the existing business is immune to a general change in the rate of interest” Frank Redington - Journal of the Institute of Actuaries 1952 The liabilities of a pension fund suffer three main risks: interest rate risk, inflation risk, and longevity risk. If interest rates fall, inflation rises, or people live longer, the liabilities of a fund increase significantly. The LDI hub for a pension fund trying to make full funding has three core roles:     1. First, ... ..read more
  • A TALE OF TWO REVOLUTIONARY IDEALS - 1968 THE "FOSBURY FLOP" AND 2003 "LIABILITY DRIVEN INVESTING"

      Dick Fosbury commented on the High Jump Final in Mexico 1968 “I guess it did look kind of weird at first,” he said, “but it felt so natural that, like all good ideas, you just wonder why no one had thought of it before me.” Liability Driven Investing “LDI” is to pension fund asset allocation and risk management what the “Fosbury Flop” is to High Jump. Mexico Olympics 1968: Richard Douglas “Dick” Fosbury (born March 6, 1947) introduced a revolutionary approach to High Jump which resulted in his winning a Gol ... ..read more
  • STEP 1 - PREPARATION - CLEARLY WRITTEN GOALS AND OBJECTIVES

     The Pension Risk Management Framework (PRMF)  "If one does not know to which port one is sailing, no wind is favourable." -  Seneca   Pension funds should start the process of taking control of their fund by defining the situation clearly and realistically, by setting clear goals and objectives that can be written down into a robust Pension Risk Management Framework "PRMF" document. First of all, the PRMF must clearly state the date that all parties agree full funding should be reached, for example, 2032. From there, a number of key ... ..read more
  • THE 7 STEP FRAMEWORK TO FULL FUNDING FOR PENSIONS

    The challenges of the pension industry are well known. People are living longer; historically the industry has placed too strong a focus on assets and failed to pay adequate attention to liabilities; there has been an obsession with return but scarce heed paid to risk. Defined benefit pension funds remain vulnerable to falling funding levels from several sources: low interest rates, inflation, volatile equity markets, and an uncertain economic outlook that renders returns uncertain too. Therefore, the risk of generating insufficient real returns to meet the liabilities and to pay pensione ... ..read more
  • 30 YEAR INDEX LINKED REAL YIELD - LAST 12 MONTHS

    Over the past 2 weeks we have seen a rise in the level of 30yr Real Gilt Yields (from 0.046% on 31 Aug to 0.206% as at time of writing this note on the 14th Sept).   Despite significant economic headwinds and uncertainty over-hanging financial markets, we have seen a "relief" rally following the recent announcements from the ECB, Wednesday's decision from the German Constitutional Court, and the FED's announcement last night confirming an open ended round of QE until unemployment drops "substantially".   For most pension funds, this rise ... ..read more
  • LEAP, AND THE NET WILL APPEAR

    Or, if you’re leaping off the Shard, perhaps it won’t.   On September 3rd I’ll be taking part in The Leap, a challenge involving abseiling at high speeds down the newly opened Shard, the highest building in Europe, in the style of a Royal Marine. This is the second in a series of Commando missions organised by the charity Commando Spirit, which invites high flying business types (their words not mine) to move way outside their comfort zones, and push themselves to the very limits, while raising money for the Royal Marines Charitable Trust Fund. The RMCTF su ... ..read more
  • INFOGRAPHIC: 0 TO 230 BILLION IN 6 YEARS

    A visual summary of Redington's first six years! ..read more
  • PINTEREST FOR PENSIONS - WHAT TYPE ARE YOU?

    Pinterest, like many similarly popular platforms for collaboration and sharing, is a tool that makes more efficient and more visible our propensity to collect, to categorise and to share the information we encounter day to day. It also makes more efficient the process of being directed to useful or interesting information by those whose opinions we value. For the pensions industry, which swirls around, absorbs and creates such a volume of information, the value of a sorting and sifting tool like Pinterest is clear.   Pinterest is so named for good reason: it’s a pinboard ... ..read more
  • ARE YOU AN AMUNDSEN OR SCOTT?

    In 1911 two men began ambitious expeditions to the South Pole. Despite facing similar conditions during their 1,400 mile journeys, Roald Amundsen secured victory for his team while Robert Falcon Scott and his team suffered defeat and untimely death. Both men and their teams contended with hostile conditions: freezing temperatures, gale force winds, fierce terrain and no safety nets. Both teams were thousands of miles from help, and without any access to communication. The conditions may have been similar; the two teams’ outcomes were not. Ultra-low gilt yields, Eurozone and r ... ..read more
  • REDINGTON CELEBRATES 6TH BIRTHDAY TODAY!

    6 years ago today, Dawid Konotey-Ahulu and I incorporated Redington as a company with one mission: To shape and influence the future of pensions.   In our original business plan to the FSA we stated that we wanted to do to pensions what Jamie Oliver had done to school food! Redington started life in Dawid's attic and the first few months involved opening bank accounts, buying furniture from IKEA and computers from Dell. The major priority was to complete our FSA registration and to build Redington's brand.   We decided to name the company after an outstanding Br ... ..read more
  • IF YOU ONLY HAD ONE SHOT...

    “Look, if you had one shot, or one opportunity to seize everything you ever wanted, in one moment... Would you capture it or just let it slip?”     'Lose Yourself' As I wrote in a recent blog, investment markets have been friendly lately, providing some pension schemes with an opportunity to de-risk at improved levels.  This week has seen a turnaround in market sentiment, with scares in the Spanish and Italian government bond markets, softer US data and disappointing Chinese growth numbers sending Gilt yields and equity indices lower. ... ..read more
  • GOOD NEWS AND BETTER NEWS

    Markets are friendly.  Collect 200bp.  Do not go directly to the PPF.   There is some good news for pension schemes as investment markets have performed well in recent months:      - Equities higher: MSCI +20% from start of rally in November    - Gilt yields higher: 30 year is 3.41%, up 44bp from December low    - Real yield positive in longer-end: 30 year currently +0.10% having reached -0.22%    - Credit spreads lower: GBP corporate bond spreads have reversed upward momentum    - Volatility ... ..read more
  • A WIN-WIN-WIN-WIN OPPORTUNITY?

    Pension schemes are increasingly looking at alternative inflation-linked assets to match their liabilities, in order to meet their Flight Plan to full funding.  I have previously mentioned opportunities in infrastructure (Social Housing, Cambridge Water, Veolia Water) and it is great to see Government encouraging pension schemes to invest in infrastructure.The Opportunity Imagine if you had the opportunity to invest not only for current pensioners but potentially for yourself and future generations... Imagine if your scheme could access attractive long-dated, inflation-link ... ..read more
  • THE ANT AND THE GRASSHOPPER

    In the pensions’ playing field one summer’s day a Grasshopper was enjoying the sun, chirping and singing to its heart’s content. ‪An Ant passed by, grin-and-bearing along with great toil the monthly contributions it was putting into its NESTegg. ‪“Why not come and drink with me,” said the Grasshopper. “instead of saving your money in that way?” ‪“I am helping to grow my money for future retirement,” said the Ant, “and advise you to do the same.” ‪“Why bother about retirement saving?” said the Grasshoppe ... ..read more
  • SPLASH OUT ON AN ILLIQUID ASSET AND GET SOME REAL RETURNS

    Last year I talked about a potential opportunity for UK pension funds to buy Cambridge Water  on an unleveraged basis in order to secure, long-dated inflation-linked cash flows, with a real return significantly above that provided by long-dated inflation-linked gilts. The idea being that as financial markets and economies continue to deleverage, UK pension schemes have the potential to fund the full spectrum of UK infrastructure needs – both in social infrastructure; for example care, education, health and housing, as well as economic infrastructure such as roads, railways ... ..read more
  • DEAR FATHER CHRISTMAS: A WISH LIST FOR 2012

    Dear Father Christmas, Last year I asked for the following things in my stocking but fear you read my letter upside-down: higher yields, lower inflation, rising markets and stronger sponsors. However, thank you for providing opportunities for pension schemes to become social capitalists and also for improving the communication and collaboration across the industry. This year, I have left tennis lessons with Rafael Nadal off the list to make room for much smaller gifts:  a Eurozone resolution, lower volatility and the agility to act on opportunities.Eurozone Resolution Every year ... ..read more
  • SOCIAL MEDIA AND PENSIONS

    “It’s up to us to intimately understand how social media impacts the bottom line and how we can steer experiences, conversations, and action in our direction, while delivering value.  Without engagement, we cannot compete for relevance.  Without relevance, we cannot compete.” - Brian Solis, Social Media Guru   Social media has taken the world by storm with over 1 billion users.  700 million people are registered on Facebook and a new member joins LinkedIn every second!  It began as a way for individuals to share their thoughts and update friend ... ..read more
  • EVERY CHANGE OF RATE

    "Every breath you take, Every change of rate, Jobs you don't create While we still stagflate, I'll be watching you" - Dean Glenn Hubbard, 2006    In 2006 the below video parody was posted to youtube.  Today, the US still awaits job creation while its economy continues to stagflate.  Ben Bernanke has replaced Alan Greenspan at the Federal Reserve and the yield curve has indeed 'flipped' - as was the aim of the Fed's latest policy to switch from holding shorter-term US Treasuries into longer maturities. 5 years on, Fed ... ..read more
  • PENSION RISK MANAGEMENT RADAR

    There are many risks that a pension scheme needs to be aware of, on both the asset and liability side of the balance sheet.   A 10% increase in assets may look great but if liabilities have risen by 15% then the scheme (and sponsor) will be worse off.   Given the current volatility in markets and uncertainty over long-term solutions, many questions are being asked about tail-risk hedging and what actions should be taken to mitigate them.  Our response always starts with, “What does your Pension Risk Management Framework (PRMF) say?”   Eve ... ..read more
  • PESSIMIST - OPTIMIST - REALIST

    A colleague sent me this photo last weekend, with the message “Saw this and thought of pensions risk management.”   I loved it!  This week’s market moves highlight how important it is to be realistic about managing your scheme’s risk. At the start of this year few people were calling for nominal gilt yields to reach new lows or for real yields to touch zero before the year was out. The former keeps happening and the latter took place yesterday (16th Novermber 2011):   Here are the yields for a few Index-Linked Gilt ... ..read more
  • GENERATION Y: IMPACT ON RETIREMENT PLANNING 2025

    Retirement provisions have seen major changes across the globe.  Company sponsors and pension schemes' can no longer afford to pay the size of pensions promised to "Baby Boomers" and "Generation X."  As a result, many countries are shifting from "DB" style pensions to "DC":    DB = Defined Benefit = Pension based on final-salary/average career earnings, often rising with rate of inflation.  Investment risk is borne by pension scheme/sponsor rather than the individual. DC = Defined Contribution = Pension based on an ind ... ..read more
  • MIND THE GEN Y GAP

    By 2025, Generation Y will hold the Office of the President of the United States, Number 10, and will make up the largest percentage of the UK’s working population.  But who and what is 'Generation Y'?  Why are the implications of their financial behavior so important for Britain’s future? Alternatively known as the ‘Millennium’ or ‘iPod Generation’, Gen Y-ers are the generation born between 1976 – 1991.   Saving for Tomorrow?   More than previous generations, Generation Y is loaded ... ..read more
  • GOOD GOVERNANCE = ABILITY TO ACT

    These are tough times for pension schemes, with market moves impacting both the asset and liability side of their balance sheets.  Should trustees rebalance their equity holdings as the market drops, use this opportunity to reallocate assets to alternative classes or remain on hold and wait for the turbulence to subside?   Without a plan, making these decisions in the depths of a crisis can often do more harm than good.  I believe Good Governance involves three key concepts, which combine to allow trustees to take appropriate decisions even in the heat of a ... ..read more
  • PLANNING ON SOME RETIREMENT GOLF?

    If you were playing the back 9 at Augusta with a chance to win the Masters, you would want as many clubs in your bag as possible. Your driver is handy to get off the tee but other clubs are needed to work your way around the course to shoot your best score.  You may need a wedge to get out of a bunker or a recovery wood if your ball rolls into the rough. Your caddy should have fully mapped out the course before teeing off.  This plan can then be used to set realistic landing targets along the way and to guide your ball back onto the fairway if a shot ever g ... ..read more
  • TAPPING THE WATER ILLIQUIDITY PREMIUM

    The age of austerity has inadvertently created countless win-win opportunities for UK pension schemes as managers of infrastructure seek to tap into sources of long-term funding. With long-term liabilities, pension schemes have always been the ideal owners of infrastructure assets. They can take advantage of the ‘illiquidity premium’ that comes with being prepared to tie money up for a long period. But this will only work if they avoid the leveraged, private-equity approach to buying infrastructure, common before the 2008 crisis, where assets are purchased with up to ... ..read more
  • THE PENSIONS' BURDEN

    The Economist have produced an excellent video explaining why pensions are becoming a burden. Without further ado:   [Please note that all opinions expressed in this blog are the author’s own and do not constitute investment advice.  Click here for full disclaimer]   ..read more

Robert is Co-Founder and Lead Investment Consultant of Redington Ltd. He cut his teeth at Deutsche Bank before joining Merrill Lynch in 2003, working as Director in their Insurance and Pensions Solutions Group. In 2008, Robert also co-founded Mallowstreet, the online pensions community which continues to grow with presence and support from the industry.

Robert is passionate about the impact of social media on business believing that education, collaboration and contributions are the best way to tackle pension challenges.

Outside of pensions and social media, Robert is passionate about tennis and is often seen practicing his serve-volley around the office.

Connect with Robert on Twitter and LinkedIn